Housing market: predictions for the nearest future

If we look at the post- homebuyer tax credit market, we can call it bipolar as, in fact, there are two completely different forces trying to influence it. Nobody (even experts) knows which direction the market will go.

As you may notice, prices for house on sale have risen and are still rising, slowly but they do. At the same time, so do interest rates and repossessions. Moreover, at present the market is oversaturated with millions of foreclosures that have to be sold but were not listed (scientists call it ‘shadow inventory’). It will have a negative impact on a real recovery if they at once appear on the market. For example, the number of houses for sale in Lancaster (California) is great in comparison with the previous year.

What is the forecast? In short term the predictions are negative but there are certain signs that by the end of 2010 the situation will become much positive.